Sterne Agee upgraded Teva Pharmaceutical Industries Ltd (ADR) (NYSE: TEVA) Friday from Neutral to Buy and raised its price target from $56 to $65.
Analyst Shibani Malhotra noted that upgrade came amid “2015 guidance that has now put a floor on Teva’s ex-copaxone earnings, increased visibility on cost savings progress, greater clarity on near-term pipeline opportunities, and our belief that long-term consensus estimates for Copaxone remain too low.”
“40mg/ml New to Brand prescriptions now represent over 80 percent of [the] franchise, increasing our conviction in Copaxone’s sustainability. We do not expect a near-term generic for the 20mg dose of the drug, which gives the company ample time to convert patients to the 40mg dose,” according to Malhotra.
Malhotra also saw “potential for upside from positive pipeline updates in 2015 [which] could result in multiple expansion. Within the specialty business we see significant potential for Teva’s abuse deterrent hydrocodone, which may have material benefits not previously seen in other products. We also expect to see data readout in the ABrated respiratory program and the NTE program.”
The analyst note concluded, “We are encouraged by Teva’s balanced approach to capital allocation and see share repurchase as a great option at current levels. Yet, with leverage down to 1.76x and FCF likely to exceed $3.5bn in 2014, Teva remains poised to execute on value-enhancing business development.”
Teva Pharmaceutical closed Thursday at $56.84, up 0.82 percent.
Latest Ratings for TEVA
| Dec 2014 | Sterne Agee | Upgrades | Neutral | Buy |
| Dec 2014 | Deutsche Bank | Maintains | Buy | |
| Dec 2014 | Bank of America | Maintains | Buy |
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